U.S. Business Compliance Overview

A Practical Guide for Startups, Subsidiaries, and Growing Organizations: Navigating U.S. Compliance

Once a business is established in the United States—whether as an LLC, Corporation, subsidiary, branch office, or partnership—it must comply with a variety of recurring federal, state, and local regulations. This guide summarizes the primary compliance areas that apply to day-to-day business operations.

US Business Compliance Overview

Understanding Compliance Requirements

Compliance is crucial for maintaining a successful business in the U.S. It ensures that we adhere to laws and regulations, which can vary significantly depending on our location and business structure. Let's explore the key areas of compliance that we need to focus on.

1) Bookkeeping & Payroll

1.1 Bookkeeping

Accurate bookkeeping is essential for any business. In the U.S., we must maintain records that comply with U.S. GAAP (Generally Accepted Accounting Principles).

Key points include:

• Required for financial reporting, audits, and tax filings.

• Most companies follow a calendar year (Jan–Dec) or elect a fiscal year.

• Records must be maintained and available for IRS/state review.

  
  

1.2 Payroll

U.S. businesses must comply with federal, state, and local employment regulations. This includes:

• Written employment agreements where applicable.

• Accurate payroll processing.

• Issuance of pay stubs.

• Withholding of taxes (federal, state, local).

• Reporting Social Security & Medicare (FICA).

• Compliance with wage & hour laws (Fair Labor Standards Act).

  
  

Payroll must be updated regularly following salary revisions or regulatory changes.

2) Assurance & Reporting

2.1 Financial Statement Audit

Certain companies are required to undergo financial audits, particularly if:

• They are publicly traded.

• They receive federal funding.

• They require audited accounts for lenders or investor reporting.

  
  

Audits must be performed by a licensed CPA firm.

2.2 Tax Audit / IRS Examination

The IRS may conduct examinations to verify the accuracy of federal tax returns. We must maintain proper documentation to validate expenses, revenues, credits, and deductions.

2.3 Internal Audit

Internal audits are generally driven by:

• Investor requirements.

• Public company obligations (SOX compliance).

• Lender terms.

  
  

Public companies and certain large enterprises must comply with Sarbanes–Oxley (SOX) internal controls. Internal audit functions may be in-house or outsourced.

3) Federal Tax Compliance

3.1 Corporate Tax

Businesses must calculate and pay federal income tax based on entity type:

• C-Corporations: Taxed at the corporate level.

• S-Corps & LLCs: Typically pass-through taxation.

  
  

Estimated quarterly taxes must be paid to avoid penalties. Annual corporate income tax returns (Form 1120 / 1120-S) must be filed on time.

3.2 Transfer Pricing

Companies with related-party or cross-border transactions must comply with U.S. transfer pricing rules under IRC §482. Requirements include:

• Arm’s-length pricing.

• Documentation support.

• Possible transfer pricing study.

  
  

Failure to comply may result in penalties.

3.3 Withholding Tax

Businesses must withhold taxes on specific payments such as:

• Employee wages.

• Certain contractor payments.

• Payments to foreign vendors (subject to treaties).

  
  

Withholding rules vary by state.

3.4 Expatriate Taxation

Foreign employees working in the U.S. are subject to federal and usually state taxes. They may qualify for treaty benefits under the U.S. Double Taxation Treaty network. Annual personal tax returns must be filed (Form 1040NR for non-resident aliens).

4) Indirect Tax

4.1 Customs & Duties

Companies engaged in importing products must comply with U.S. Customs & Border Protection rules. Duties vary based on product classification (HTS code), value, and country of origin.

4.2 State & Local Sales Tax

The U.S. does not have GST/VAT at the federal level. However, sales tax applies at the state and local level for most goods and some services. Compliance includes:

• Sales tax collection.

• Filing returns (monthly/quarterly/annual).

• Maintaining exemption documentation.

  
  

Rules vary significantly by state.

5) Corporate / Secretarial Compliance

Businesses must adhere to company law requirements, including:

• Annual report filings with state authorities.

• Registered agent maintenance.

• Corporate governance (minutes, resolutions).

• Beneficial ownership reporting (FinCEN BOI from 2024).

  
  

6) Employment & Labor Regulations

Employers must comply with:

• Federal labor laws (DOL).

• State employment rules.

• Anti-discrimination compliance (EEOC).

• OSHA workplace safety.

• Workers’ compensation.

• Unemployment insurance.

  
  

Retirement plans (e.g., 401(k)) and benefits contributions may apply. Some states mandate paid leave and other benefits.

7) Other Regulatory Requirements

Depending on the state/local jurisdiction, we may need to consider:

• Business licenses.

• Professional permits.

• Local business taxes.

• Zoning requirements.

  
  

Examples include:

• California Franchise Tax.

• New York General Business Registration.

  
  

Requirements vary by industry and location.

8) Key Compliance Calendar (Typical)

To stay compliant, we should keep track of the following:

• Quarterly estimated taxes.

• Annual corporate tax return.

• Annual report/state filing.

• Payroll tax filings (monthly/quarterly).

• Sales tax filings (monthly/quarterly).

• BOI reporting (new entities).

  
  

Exact timelines depend on entity type and state.

Outsourcing Compliance

Managing U.S. regulatory obligations can be complex and time-consuming. Outsourcing compliance is a cost-effective way to ensure:

• ✅ Accuracy

• ✅ Timely reporting

• ✅ Reduced risk

• ✅ Streamlined operations

  
  

We help startups, growing businesses, and international companies stay compliant—so leadership can focus on core operations.

Reach out to us to learn how we can assist with U.S. compliance needs.